Chicago, Illinois – Social Security beneficiaries in 2024 are facing several changes that will impact their benefits and finances. One of the significant adjustments this year is a 3.2% cost-of-living increase, pushing the average retirement check to $1,864.52 per month. While this adjustment is lower than last year’s, it still exceeds the average over the past few decades. The impact of this change will vary depending on factors such as the type of benefit and the claiming age.
Another key change affecting Social Security recipients is the end of a spousal rule that allowed switching between benefits to maximize the amount received. However, this rule now only applies to those born before January 1, 1954. Additionally, seniors continuing to work while receiving Social Security benefits will face an earnings test, with an increased exempt amount of $22,320 in 2024.
Moreover, the maximum earnings subject to the Social Security payroll tax have risen to $168,600, affecting certain individuals who have crossed this threshold. While this change does not directly impact benefits, it will influence the net income for some workers in 2024. The Social Security Administration has also made adjustments to simplify the handling of overpayments, providing beneficiaries with more affordable repayment options.
In terms of state income taxes on Social Security benefits, only 10 states currently tax these benefits, down from 12 states in the previous year. States like Missouri and Nebraska have ended state income taxes on Social Security benefits, resulting in potential tax savings for beneficiaries. These changes highlight the evolving landscape of Social Security benefits and the financial implications for recipients in the new year.